Managerial compensation and corporate spinoffs

Corporate Restructuring, Downsizing and Managerial Compensation

There is common consensus that managerial compensation is strongly tied to rm size and much less so to nancial performance. One suspects that observed restructuring and downsizing in corporations in recent years may have an eeect on these results. Based on multi-task theoretical considerations, our evidence for German industrial rms shows that pay for rm size elasticities decrease only for larg...

IT, Corporate Payouts, and the Growing Inequality in Managerial Compensation

Three of the most fundamental changes in US corporations since the early 1970s have been (1) the increase in the importance of organizational capital in production, (2) the increase in managerial income inequality, and (3) the increase in payouts to the owners. There is a unified explanation for these changes: The arrival and gradual adoption of information technology since the 1970s has stimul...

Price pressure in corporate spinoffs

Institutional investors who acquire stock via equity distributions from stocks they already own tend to sell these holdings immediately, especially if the spinoff is much smaller, or in a different industry, than the parent. However, these sales are partially offset by purchases from investors that specialize in the characteristics of the spinoff. In a large sample of spinoffs between 1980 and ...

Managerial Power and Compensation

According to the widely used Managerial Power Model, a higher hierarchical position with associated higher power leads to higher compensation. In contrast, the Compensating Wage Differentials Model argues that there is a non-positive relationship between positional power and total compensation. Both power and income yield utility and in equilibrium managers are prepared to trade-off the two ele...

Managerial Optimism and Corporate Finance